Will March Thaw the Frosted Auto Industry?

March 9, 2014

You would think that with this winter’s snowfalls and cold weather, people would want to buy a pickup truck or SUV to have it easier on the road.
Yet, since the beginning of the year, not many potential customers headed for the showrooms or bought a vehicle.

: eawortman / Foter / CC BY-NC-SA

Auto dealers had to offer high incentives to lure buyers and make same sales as they did back in February 2013.

In fact, compared to last February, sales of light cars and trucks fell 300 vehicles short than the 1,193, 872 units sold a year ago.

On the other side, General Motors Co, Ford Motor Co, and Chrysler Group reported stronger sales than expected, but mainly because of the higher incentives the companies offered.

Some experts wondered, however, if incentives remain the primary hook for customers, what would industry’s profitability look like in the future?

Reportedly, three months in a row the U.S. auto industry sales were weaker than expected. Hopes now lie in March, with rising optimism that the warmer weather will bring in more customers.

Furthermore, because most automakers have not cut production, the slower sales would lead to oversupply.

Experts predict that this will create even more pressure for auto dealers to raise their incentive levels and put a question mark on the industry’s future development.

Read the full story at The Christian Science Monitor.